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fHIS DOCUMEMT I S THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMENT).
COPY NO,
S E G R E T.
C A B I N E T
5 (26).
Meeting of the Cabinet t o be held i n 'the Prime M i n i s t e r s
Room at the House of Commons, S.W.1-.-, on Thursday,
February 11th, 1926, at 5 . 3 0 P.M.
A G E N D U M,
STANDING COMMITTEE ON
EXPENDITURE. .
(Reference Cabinet 22(25) Conclusion 2 ( b ) ) .
Report of Committee,
( C P . 54 (26)
circulated h e r e w i t h ) .
Memorandum by the Minister of Labour regarding
Financial assistance f o r Local Authorities ­
i n s t i t u t i n g R e l i e f Works,
-'
( C P . 29 (26)
already circulated)..
Memorandum ^7 the Secretary f o r Scotland
regarding Local Authorities and Unemployment.
( C P . 49 (26)
already c i r c u l a t e d ) .
(Sd.) M.P.A. HANKEY,
Secretary,
2 Whitehall gardens, S , W , ( 1 ) .
10th February, 1926.
Cabinet.
HIS
pocumr
is
THIS
PROP^ETY OF H I S
BitiTAimic MAJISSTY's GQVHRHKJ^T)2
COPY HO
C A B I H J
T. b ( 2 6 ) .
CONCLUSIONS of a. Meeting of the Cabinet held at the House
of Commons,3.W.1., on THURSDAY FEBRUARY 11th,
1926, at 5.30 P.M.
PI&'3SKT:-
The Bight Hon. Stanley Baldwin, M.P.,
( I n the C h a i r ) .
Prime M i n i s t e r .
ho Right Hon.
Sir Austan Chamberlain, K..G..M.P.
Secretary of State f o r .
Foreign A f f a i r s .
The Eight Hon.
Visoount Cave, G.O.M.G.,
Lord Chancellor.
e Most Hon.
The Marquess of Salisbury,
,G C .Y. 0. ,C.B. ,
Lord Privy Seal.
The Right Hon.
W.S* Churchill, C I . , M . £ . ,
Chancellor of the iSxchequer..
e Right Hon.
Sir William Joynaon-Hicks.,
Bt.,M.P., Secretary of
State f o r Home A f f a i r s .
The Eight Hon..
L o S . Amery, J,i. P.., Secretary
of State for Dominion
A f f a i r s and Secretary of
State f o r the Colonies.
o Sight Hon.
Sir Laming V/orthington-Bvans,
Bt. ,G.B.iS. ,M.P., Secretary
of State f o r war.
The Eight Hon.
Sir Samuel Ho&ro, B t . ,
G.M.G...M.P., Secretary of
State f o r A i r .
a Bight Hon.
iV C Bridgeman, M.P.,
Pirst Lord of the Admiralty,
The Eight Hon.
Sir P h i l i P C u n l i f f e - L i s t e r ,
K.B.S.,M-C.,M.P., President
of tne Board of Trade.
a Right Hon.
Heville Chamberlain, M.P.,
Minister of Health.
The Eight Hon.
r/..JS. Guinness., D.S.O.,M.P.,
Minister of Agriculture
and Fisheries..
o Right Hon.
Lord iiu3taca Percy, M- P.,
President of the Board .
of Education.
The Right Hon.
Sir Arthur Steel-Maltland,
Bt,. ,M.P., Minister of
Labour.
e Right Hon.
Viscount C e c i l of Chelwood., 3L.C.,,
Ohanoollor of the Duchy of
Lancaster.
The Right Hon.
Sir Douglas Hogg, K.C. ^ J E ^ ^
Attornyy-Generalo
a
0
tUPoA.
Eankey, G.C.B
REPORT OP
STANDINGCOMMITTEE
ON EXPENDITOBE.
1-
The Cabinet had before them the following
documents i n regard to Expenditure:The Report of the Cabinet Committee
(Paper C P . - 5 4 ( 2 6 ) ) :
Previ cms
Reference:
Cabinet 22
(25), Con­
elusion 2(b) . )
A Memorandum by the M i n i s t e r o f Labour
regarding Financial Assistance f o r
Local Authorities i n s t i t u t i n g
R e l i e f Works (Paper C.P.-29 ( 2 6 ) ) :
A Memorandum by the Secretary f o r
Scotland regarding Local
Authorities and Unemployment
(Paper C P . - 4 9 ( 2 6 ) ) .
The Prime Minister thanked his colleagues
f o r the co-operation which, often i n circumstances
of great d i f f i c u l t y , they had been able to g i v e in
the essential work of economy.
A general s a t i s f a c t i o n was expressed i n
p a r t i c u l a r at the great e f f o r t s made by the Board
of Admiralty, the Army Council and the Air Council
in achieving very large economies notwithstanding
the adoption during the past year of p o l i c i e s
i n v o l v i n g expenditure, such as the Cruiser Programme
and the continuance of the Home Defence A i r Force
Scheme.
A f t e r discussing each item of the proposals
of the Standing Committee on Expenditure, the
Cabinet, agreed —
( a ) To g i v e t h e i r general approval to
the Report of the Cabinet Committee
and to the f o l l o w i n g proposals f o r
e f f e c t i n g reductions of expend!­
ture and increases of revenue,
in which are incorporated some
s l i g h t amendments to the R e p o r t : ­
1926/27,
Reduction of Expenditure
-
Ministry of Agriculture
Ministry of Pensions
Ministry o f Labour
Unemployment R e l i e f
­
St.David's Committee
Women and Juvenile Training
Loans to Local Authorities
Health Insurance - Reduction of State Grant
Recovery o f Cost of Audit
and Valuation
Public Works and Buildings
Old Age Pensions
Compensation - I r e l a n d , E f f e c t of new AgreementA i r Estimates. Reduction
to £16 m i l l i o n
Railway Agreements Liquidation
Post Office
Forestry Commission
Sugar Beet
Middle East Services
Oversea Settlement
Colonial Services
Treasury Notes
Total o f
PART I I .
(a)
£
683,000
1,000,000
5,417,000*
230,000
60,000
100,060
2,310,000
K
190,000
450,000
605,000
300,000
2,000,000
100,000
100,000
100,000
250,000
740,000
310,000
50, 000
100 000
t
15. 095 000
t
INCREASES OF REVENUE.
1926 .
Revision of.Estimate f o r
Miscellaneous Revenue
,.
Navy, Army and A i r Force
Insurance Fund Surplus
.,
Bankruptcy, &e.,Fees B i l l
Road Fund —
From Balances
Existing Taxation ( c l a s s i f i e d
a 3 "luxury")
S t . David's Committee grants
Post OfficeTotal of I I
Total of Parts I and I I
£
1,000,000
36
1,100,00036
350, 000'
.36
8,000,000
8, 000,000
800,000
800,000
13,450,000
28,545,000.
Require l e g i s l a t i o n .
(Contd.)
FART I I I .
FURTHER PROPOSALS FOR REDUCTION OF
EXPENDITURE.
1926/27.
*
(under i n v e s t i g a t i o n by
Oolwyn Committee.)
94
Education — reduction of
Provisional Estimate
National Health Insurance
Recovery of Cost of Central
Administration i n a d d i t i o n
to Audit and Valuation
Navy reduction to £58,100,000
Army reduction to £42,500,000
Dominion Marketing Scheme Postponement
£
3
t
. .
. . .
(under consideration.)
6,100., 000
2,000,000
(under consideration.)
. ..
8,100,000.
Grand Totals of
I , I I and I I I . . .
36.645.000.
Total o f I I I
s Require l e g i s l a t i o n .
/ Plus any reduction oh
Education, National Health
Insurance - Cost of Admin&s­
t r a t i o n , e t c . , Empire Market­
ing.
( b ) Ministry o f Labour Reduction (£5,417,000):
In view of the f a c t that the Minister of
Labour regards as unduly optimistic the
average figure o f unemployment (1,050,000)
on which the reduction in the Vote o f the
Ministry of Labour i s based — t o approve
the reduction i n the Government contribution
to the Unemployment Fund, on the understand­
ing that the Chancellor of the Exchequer i s
prepared, in introducing the Economy B i l l ,
to intimate that the forecast as regards
Unemployment i s necessarily speculative in
character; that the e f f e c t on the Fund of
developments i n the Unemployment s i t u a t i o n
w i l l be kept under careful observation; and
t h a t , i f the s i t u a t i o n develops unfavourably,
the question w i l l be re-examined i n the l i g h t
of the existing s i t u a t i o n and Parliament w i l l
be asked to make p r o v i s i o n , by Supplementary
Vote or otherwise, i n ample time to safeguard
the Fund against insolvency:
( c ) Health insurance — Recovery of Cost of
AwU^ ,Eflfl ^aluatjpn (£190,000);
To take note that there i s some uncertainty
as to how f a r i t w i l l be possible to r e a l i s e
this f i g u r e by the means contemplated by
the Economy Committee., but that the question
i s being studied in the hope of achieving
economies:
( d ) Middle East Services (£740 000):
T
To take note that the reductions i n
respect of the Palestine Frontier
Forces and the Trans-Jordan Grant-in-Aid
(£304,000) were to be made " i n the absence
o f strong objection by Lord Plumer" ( C . P . ­
54 ( 2 6 ) , Para.20 ( i i ) (d)J, and t h a t
Lord PI toner has expressed strong
objections: and to i n v i t e the
Secretary o f State for the Colonies
to put the strongest pressure on the
High Commissioner of Palestine to
achieve this economy, and in so doing,
to inform Lord Plumer of the strong
f e e l i n g of the Cabinet t h a t , at a time
when Palestine has a surplus in i t s
Budget and Great B r i t a i n has a d e f i c i t ,
this mandated t e r r i t o r y ought to accept
the t r a n s f e r of f i n a n c i a l burdens now
proposed more p a r t i c u l a r l y as, from a
p o l i t i c a l point o f view, i t i s most
important to reduce the Middle East
Vote:
( e ) T r a v e l l i n g Expenses:
To r e j e c t the proposal that the
Exchequer should in no case pay
more than t h i r d - c l a s s fares for
t r a v e l l i n g expenses, as the e f f e c t
of t h i s proposal would be to discrim­
inate against Members of Parliament
lacking the means to pay the d i f f e r ­
ence between t h i r d and f i r s t - c l a s s
f a r e , would be c r i t i c i s e d as class
l e g i s l a t i o n , and was open to many
other o b j e c t i o n s :
(f)
Reduction of
Staff:
To authorise the immediate c i r c u l a t i o n
to Departments of a Treasury Circular
on the l i n e s of the draft contained
to i £ v 6 8 ? ? g & f j J i e d I c i I l o n x A M l ? D l i e w :
( g ) Hours o f Attendance i n the C i v i l S e r v i c e :
p
0
2
d
( i ) That the minimum hours of attendance
of new entrants of that portion of the
s t a f f of the C i v i l Service which i s at
present employed on the basis of a
7-hours day or 42-hours week, should be
extended to 8 hours a day with a h a l f ­
holiday on Saturday i f the state of
public business permits:
( i i ) That the minimum hours of attendance
of e x i s t i n g members in the C i v i l Service
should remain as at present:
( h) Educ at ion:
To take note that the reductions in
the p r o v i s i o n a l Estimate of the Education
Department are under consideration by
the Colwyn Committee:
( i ) National Health Insurance — Recovery of
Cost of Central Administration in a d d i t i o n ^
to Audit and Valuation (.2700.000):
To take note that t h i s proposal i s
found to be impracticable, but that
the p o s s i b i l i t y o f some economies
under this heading are s t i l l under con­
sider a t i o n :
( i ) ) To take note that., as the result
of a discussion by the Committee of
Imperial Defence the same morning
on the recommendations of the Colwyn
Committee on the subject of the Naval
Oil Fuel Reserve, the Admiralty E s t i ­
mate w i l l be reduced to £58 100,000
(as compared with £57,500,000 proposed
by the Colwyn Committee) and that the
t o t a l economies w i l l amount to £6.,.100.,.000
instead of £6,7 00,000 as stated in the
Report of the Standing Committee on
Expend i t u r e :
( i i ) That a passage in regard to the
"shadow cut" should be included i n the
forthcoming Navy Estimates similar to
the passage i n the statement accompany­
ing last y e a r ' s Navy Estimates, which
was as f o l l o w s : ­
"As i n the Estimates f o r 1924-25, a
special overhead deduction has, by
decision of H.M, Government, been
made on the p r o v i s i o n f o r contract
work i n Votes 8, 9 and 10, to discount
In advance possible delays in the
progress o f such work. This reduc­
t i o n of the money provision i s not
intended to a f f e c t the normal p r o ­
gress o f the services to which I t
a p p l i e s , and i f the delays do not
In fact occur, Parliament w i l l in
due course be i n v i t e d to make good
the deficiency to such extent as
may be necessary."
( k ) Empire Marketing:
That, i n view o f the paramount import­
ance of f u l f i l l i n g the pledges given
to the Dominions, i t i s necessary to
make p r o v i s i o n i n the Estimates for
some substantial expenditure i n connec­
t i o n with the Empire Marketing Scheme,
but that i t i s improbable that the
ultimate f i g u r e of £1,000,000 could be
w i s e l y spent i n the f i r s t year of the
Scheme.
The f i x i n g of the exact f i g u r e was
l e f t to the Chancellor of the Exchequer
In consultation with the Secretary o f
State f o r Dominion A f f a i r s .
The Secretary of State for Dominion
A f f a i r s was authorised to inform the
Dominions of the Governments intentions
In t h i s m a t t e r .
2 . The Minister of Health was authorised to
Inform S i r Harry Goschen, the Chairman of the
previous
jeferene e:
Cabinet 22
( 4), Con­
elusion 4 . )
3
Necessitous Areas Committee, that the Government'
wish was that the Committee should adhere to i t s
Terms o f Reference, and,consequent l y , that I f no
scheme f o r the r e l i e f o f necessitous areas which
they could recommend as acceptable was placed
b e f o r e them, they should not endeavour to devise
t h e i r own scheme.
2, Whitehal 1 Gardens , S.W. 1,
February 11, 1926.